Why the Worlds Major Banks are on the Verge of Collapse

I was hoping that someone had their head up in class today! Yes everyone A.I.G. has asked for ANOTHER bail out and not only that they have another
client big ticket treatment trip planned that was discovered....Guys I have called my local and state political rep and I have made it clear as of
today I will do all in my power to make sure their re-election doesn't happen if we do not start bringing these people in to face criminal charges I
urge everyone in here who give a crap to do this.

As much as I agree with your conviction, you are writing letters to politicians that were bullied into a 4 day bailout package. They did not
represent the people but folded to pressure from the lobbyists and elite.

We need people with ethics that no matter what the cost, even their seats will vote for the people.

I was hoping that someone had their head up in class today! Yes everyone A.I.G. has asked for ANOTHER bail out and not only that they have another
client big ticket treatment trip planned that was discovered....Guys I have called my local and state political rep and I have made it clear as of
today I will do all in my power to make sure their re-election doesn't happen if we do not start bringing these people in to face criminal charges I
urge everyone in here who give a crap to do this.

As much as I agree with your conviction, you are writing letters to politicians that were bullied into a 4 day bailout package. They did not
represent the people but folded to pressure from the lobbyists and elite.

We need people with ethics that no matter what the cost, even their seats will vote for the people.

Can't agree with you more!
But we can't just do nothing we have to keep putting pressure on these stooges. I know this system is set up to protect the rich as we are seeing
first hand right now. I had a mother who's child is having braces put on in our office her husband works..."worked" for A.I.G. He was let go last
week everyone in the accounting dept. was let go in his office and she suspects to cover any probes that might come around which should come
around....

The article that OP posted is biased: it implicates AIG as an inventor of a hedge called "the credit default swap." That's not true. It was JP
Morgan execs who became unhappy back in 1990s with so much inactive reserve money. So they began to dig a loophole . . .

By the mid-'90s, JPMorgan's books were loaded with tens of billions of dollars in loans to corporations and foreign governments, and by federal
law it had to keep huge amounts of capital in reserve in case any of them went bad. But what if JPMorgan could create a device that would protect it
if those loans defaulted, and free up that capital?
What the bankers hit on was a sort of insurance policy: a third party would assume the risk of the debt going sour, and in exchange would receive
regular payments from the bank, similar to insurance premiums. JPMorgan would then get to remove the risk from its books and free up the reserves. The
scheme was called a "credit default swap," and it was a twist on something bankers had been doing for a while to hedge against fluctuations in
interest rates and commodity prices. While the concept had been floating around the markets for a couple of years, JPMorgan was the first bank to make
a big bet on credit default swaps. It built up a "swaps" desk in the mid-'90s and hired young math and science grads from schools like MIT and
Cambridge to create a market for the complex instruments.

There are not too many 25-year-old guys who would be allowed to go through $300 billion in loans to asses the risks. It's a cool story.

This is is mostly pointless, since no on can do anything about it and the worst is still to come but, I was a Retail, Commercial and Investment Banker
over a 32 year period having starting with then Talman Home Federal Savings of Chicago in the late 70s where I became a SRVP and "Short Sword" to
the then President (names don't matter) but I was active in the decisions that resulted in the creation of some refer to as the Wholesale Mortgage
Lending Market/Conduit.

This is a very long story that I am not in the mood to tell but, basically our decision at Keystone in 1979 resulted in the guy who mows your lawn or
sold you your used car becoming what you know as your "Mortgage Broker"....I would like to refer to them as the unwashed, uneducated, unscrupulous
used car salesmen scum of the world but, many of them are you brother, mother, aunt, uncle or as I said, the guy who used to mow your lawn; so I am
not going to name call, only convey the contempt I and others always had for them. However, these "Brokers" were only one part of the demise of the
Mortgage Lending Industry, as we could not have destroyed ourselves without the help of many others, including but not limited to the Homebuilders who
built Zero Lot Line 3,000 Sq Ft cracker boxes all over the country and made it possible for Juan Valdez and pretty much anyone to buy them.

No, the demise of the America has taken a lot of work from many people, from all walks of life. After all, America wanted "Equality" and "Equal
Opportunity" for all but, the reality is, none of you were raised up, everyone has been brought down...much like the education system; the standards
have been brought down to include everyone or most everyone, even when and where their best use and potential was digging a ditch. I am an MBA with
an Engineering Degree, having always been at the top of my class; this is not really much to brag about in light of what I was competing with (am I
getting my point across?)

If you haven't watch the Video Documentary "The Money Managers", you need to in order to get what I am going to say in total here you can find it
here: video.google.com...#

So let's see, how do I tell you the truth and maybe ATS won't censor it?

I am a descendant of a family that came here with Capt John Smith in 1607; I not only know who my father was but, we are very much aware of our family
going back 2,400 years and yes, there are 4 kings in my bloodline and many famous and infamous men in my tree that included Slave Owners and Indian
Killers, Industrialists and Military Heros . Trust me when I tell you that the America the Founding Fathers had in mind is not the America we have
today; many of you would still be slaves; there would be no Gay Marriage and a long list of other things so many are proud of but which would have you
hanging from a tree were George Washington the President. Hold on, I am not putting George Washington on a pedestal; it is a known fact in my family
that Washington was a "Kept Man" who dressed up and looked right for the job more than ever having any great strengths or character but, someone
needed to be the figure head and he wouldn't shut up until he was given something important to do, so they let him. Do your own history search.
Also, do a search of Abe Lincoln and you will find that Abolishing slavery was NOT in his game plan until the north was losing.

Fact is, what most of you believe is America is mostly Lies and Myths. The truly heroic, noble, honest and forthright men died for what they believed
in. Something you might remember when being so impressed with McCain. But, a maybe more important point to make here is that if and when we had a
President that was honest, forthright and truly acted in the best interest of America and the American people, he was killed/assassinated. Yes, I am
telling you that all our Presidents with few exceptions were bought and paid for liars, cheats, thieves...

The one thing I would point out is that the Basel II regulations are merely the symptom (and there is an endless stream of symptoms)of a greater
cause: monetary policy. The fiat currency is the root cause of this whole mess and if that is not addressed, I see nothing that will stop this from
turning into an absolutely catastrophic event. Believe me, we are closer to the beginning than the end of this mess and I fear the end will leave us
in a far different world than what we know today.

Originally posted by ZeroKnowledge
Thank you! Finally i can understand why this mess started. However i still do not understand why this bubble was allowed to inflate. I mean surely
people in governments who have connections in money sector were aware of this scam and that it will eventually burst. Or - "eat and drink for
tomorrow we die" philosophy prevailed?
Until those guys that make the decisions (and big money) will be forced to pay for their dirty tricks - this is bound to happen again.

The current US Treasury Secretary, Henry Paulson, was the CEO of Goldman Sachs during a part of this mess.

Great thread. Thank you OP
what I see is most of you see the problem at hand, (bailout the elite)
but no one is pissed off that the American people did not want this bail out. and now the government has more control over all that we have left
Where are the People.
God help us all

Originally posted by stander
The article that OP posted is biased: it implicates AIG as an inventor of a hedge called "the credit default swap." That's not true. It was JP
Morgan execs who became unhappy back in 1990s with so much inactive reserve money. So they began to dig a loophole . . .

By the mid-'90s, JPMorgan's books were loaded with tens of billions of dollars in loans to corporations and foreign governments, and by federal
law it had to keep huge amounts of capital in reserve in case any of them went bad. But what if JPMorgan could create a device that would protect it
if those loans defaulted, and free up that capital?
What the bankers hit on was a sort of insurance policy: a third party would assume the risk of the debt going sour, and in exchange would receive
regular payments from the bank, similar to insurance premiums. JPMorgan would then get to remove the risk from its books and free up the reserves. The
scheme was called a "credit default swap," and it was a twist on something bankers had been doing for a while to hedge against fluctuations in
interest rates and commodity prices. While the concept had been floating around the markets for a couple of years, JPMorgan was the first bank to make
a big bet on credit default swaps. It built up a "swaps" desk in the mid-'90s and hired young math and science grads from schools like MIT and
Cambridge to create a market for the complex instruments.

There are not too many 25-year-old guys who would be allowed to go through $300 billion in loans to asses the risks. It's a cool story.

yes JP Morgan are the head de-generates but they are PROTECTED they are the favorite sons on Wall street.

This article is not blaming the Basel II regulations , it is blaming the poor loans made by banks and the CDS insurance AIG gave out to create a loop
hole to get around basel II, in order for them to satisfy there greed and desperation to keep expanding the credit bubble.

Originally posted by cpdaman
This article is not blaming the Basel II regulations , it is blaming the poor loans made by banks and the CDS insurance AIG gave out to create a loop
hole to get around basel II, in order for them to satisfy there greed and desperation to keep expanding the credit bubble.

I didn't say it does. It would take a great deal of stupidity to do so.

The article singled out AIG as the master-mind and the sole instrument of the financial crises. But that's far from the truth. There are traffic
regulations and cops cruise the streets to enforce them. There are financial
regulations, but no one seemed to care that some of them had not been followed. There are thousands of laws and regulations designed and strictly
enforced to keep ordinary folks in line, but when it comes to the big boys -- let's not be a tight ass, right?

It's true that AIG was a major player in the scheme; it became a "role model" for other insurance companies, such as MetLife. It takes much more
than one company to mastermind and commit economic suicide.

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